The Magazine

The Rise of Rubio

Will a longstanding friendship block his vice presidential prospects?

May 14, 2012, Vol. 17, No. 33 • By STEPHEN F. HAYES
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Rubio and Rivera met in 1992, when Rubio was an undergraduate at the University of Florida and both young men were volunteers for the congressional campaign of Lincoln Diáz-Balart. Four years later, Rivera brought Rubio into Bob Dole’s presidential campaign in Florida. A year after that, Rivera helped run Rubio’s own campaign for West Miami city commissioner. The two men served together in the Florida legislature over much of the past decade. They share a circle of friends in the tightknit Cuban-American community, and Rubio’s wife, Jeanette, is very close to Rivera’s girlfriend, Esther Nuhfer, who works for Rubio’s “Reclaiming America” PAC.

Their mutual friends say that while their careers have followed similar trajectories—from Miami to Tallahassee to Washington—the two men are very different. Rivera has never stopped being an operative. He’s always scrambling to raise money, to put together coalitions for one effort or another. For Rivera, politics is fundraising and trading favors and winning.

Rubio is the opposite. Rubio is the visionary, and while he’s always been ambitious, he is consumed with policy and driven by a deep and abiding belief in the American idea. For Rubio, politics is the means to an end, not an end in itself.

Now, with Rubio the subject of intense speculation that he could be on the Republican presidential ticket, Rivera finds himself the subject of multiple investigations.

The public list of Rivera’s questionable activities is long and almost certainly incomplete. The FBI and IRS are both reportedly investigating Rivera. Last month, Miami-Dade state attorney Katherine Fernandez Rundle ended an 18-month investigation without charging Rivera with any crime. Her office issued a “Close-out Memorandum” to explain the findings of the investigation, conducted jointly with the Florida Department of Law Enforcement. Rivera and his allies have called the memo an exoneration. It is no such thing. In fact, the 16-page document is a devastating indictment of Rivera—in the figurative, if not the literal, sense—and a plea for further examination of Rivera’s conduct.

The Florida investigation focused on two areas: the payments Rivera and his family received for lobbying work he performed for gambling interests while serving as a member of the Florida legislature and his alleged personal use of campaign funds.

In 2005, south Florida voters supported a measure to allow slot machines at racetracks and other businesses in Broward County but rejected the same proposal in Miami- Dade. Rivera immediately sought to reverse the decision in Miami-Dade and in 2006 reached an agreement with Fred Havenick, the owner of a dog track in Flagler, to serve as the “chief campaign strategist” for a second vote in 2008. After Havenick’s death in June 2006, Rivera signed a contract with his surviving relatives. According to the Close-out Memorandum, Rivera directed payments for his work to Millennium Marketing, a company he had created in 2000, and “revived” in 2006, with his mother, Daisy Magarino, and his “godmother,” Ileana Medina, as principals. Rivera, who was elected to the Florida house in 2002, worked “almost on a daily basis on behalf of the slots initiative” in late 2007 and early 2008 “from an office at what was known then as Flagler Dog Track.” Millennium was ultimately paid more than $500,000 for work on the project, and investigators were able to trace more than $100,000 of that back to Rivera’s bank accounts.

It’s not illegal to work as a political consultant while serving in the Florida legislature, but elected officials are required to disclose the sources of their income. Rivera failed to disclose any income from Millennium or his work on the gaming referendum (he later amended those reports). When investigators questioned attorneys for Magarino and Medina about the arrangement, “they confirmed their association with the corporation and the fact that it was the subject [Rivera] that performed the services for the slots initiative that Millennium was paid for.”

Prosecutors were told that the payments from Millennium were “loans,” and they were given promissory notes to support that claim. But when they attempted to verify that the promissory notes had been produced at the time the loans were supposedly made—by dating the ink on the papers and examining the hard drive of the computer that produced them—they were stymied. “We were told during a sworn statement that the original promissory notes were lost and that the computer stopped working and was discarded.” Because investigators were unable to prove that Rivera had falsified his income disclosures with “corrupt intent” or that the stories about the loans were untrue, they could not charge Rivera with a crime.

The investigation then turned to Rivera’s campaign finances. Rivera had campaign accounts to finance his runs for public office and his efforts to win election as a Republican committeeman. The former are regulated, the latter are not. Investigators questioned Rivera about the commingling of his various accounts and his alleged use of political contributions for personal spending. Rivera responded with “a very broad interpretation of what constitute permissible campaign related expenditures,” telling investigators that “he was for a period of almost a decade, continuously and simultaneously engaging in official business, campaigning for public office, as well as campaigning for committeeman.” Rivera “explained as a single man without children, his entire life’s focus was on political activities related in some manner to campaigns for office” so “that virtually every travel related expenditure—airfare, automobile costs, lodging, meals, and related miscellaneous expenses for personal items and entertainment—were indeed permissible campaign related expenditures.”

Rivera didn’t just spend the money on himself. “According to the subject’s broad interpretation of the law, it was appropriate and permissible to pay for his female companion’s expenditures as well, as they were essential to his election campaigns.”

Ironically, the revelation that triggered the Florida investigation—Rivera’s claim that he derived income from the U.S. Agency for International Development (USAID)—is not even mentioned in the Close-out Memo-randum. That doesn’t mean it’s not troubling.

From 2003 to 2009, Rivera claimed that funds from USAID were a primary source of income outside of his modest salary as a legislator. But USAID told the Miami Herald, which broke the story, that it had no record of employing Rivera. Confronted with this unpleasant reality, Rivera claimed that a company he founded—Interamerican Government Relations—was a USAID subcontractor and that he received the payments through that entity. When he was asked who the primary contractor was, Rivera refused to answer. His campaign provided the Herald with documentation showing that he had taken three trips to Central and South America over a three-year period between 2005 and 2008. But when Herald reporters tried to confirm that Rivera was working for USAID on these trips, a State Department official told them he was not. “The three trips cited by Rivera were not organized by USAID, nor were they tied to a government consulting contract or development work,” the Herald reported on October 12, 2010.

In response to questions from The Weekly Standard about whether USAID has any documentation of payments to Rivera, either directly or through Interamerican Government Relations, agency spokeswoman Alexandra Glass said, “USAID has no record of Rep. David Rivera working for the Agency.” Rivera’s congressional office referred requests for an interview to his campaign, which did not respond.

Should Marco Rubio have to answer for David Rivera? “They’re not the same person,” says one Rubio friend. “They’re separate people who live separate lives.”

That’s true. Rubio is not mentioned in the report from Florida investigators, and when Rubio is mentioned in news coverage of Rivera’s troubles it’s not because there is any suggestion of his involvement in Rivera’s schemes but merely to note the potential damage to Rubio’s political fortunes. (The one exception: Deutsche Bank threatened to foreclose on the home that Rubio and Rivera own together following a billing dispute.)

So it’s possible that Rivera’s problems will remain Rivera’s problems. There is, of course, a recent example of a politician achieving tremendous success in spite of problematic associations. In the 2008 campaign, Republicans tried with limited success to bring attention to Barack Obama’s friendships with radicals like Bill Ayers and crooks like Tony Rezko. Obama survived his long relationship with the Reverend Jeremiah Wright—who married the Obamas, baptized their children, and addressed them from the pulpit for years, sometimes using stridently anti-American and hateful language. 

But Obama did one thing that Rubio has been unwilling to do—at least so far. He distanced himself from the problem. Despite an increasing number of private calls for Rubio to do the same, from good friends and prominent national Republicans, he is sticking by Rivera. 

Rubio has agreed to attend a fundraiser in Washington for Rivera this month. Sources close to the senator say he committed to the fundraiser before the release of the detailed report on the Florida investigation. Still, he has no plans to cancel.

“I guess it’s because I’m new to Washington, but I’ve never felt that—I mean, maybe it’s acceptable here, it isn’t to me—to turn your back on friends when they’re going through a difficult time, no matter, you know, what they may have done or not done,” Rubio told Bret Baier of Fox News. “And so in his case, he’s a friend and I’m going to give him the benefit of the doubt.” 

Rubio described his relationship with Rivera in his interview with The Weekly Standard. “The best way to characterize it is—I’ve known this guy when he was a punk and I was a punk,” Rubio told me. “He’s my personal friend. Now the guy’s got some problems. And I can’t make excuses. I don’t know what the story is there. I don’t have access to his bank accounts.” 

Some friends of both Rubio and Rivera want Rivera to do what Rubio has thus far been unwilling to do. 

“If David wanted to be a real friend to Marco, he would not be putting Marco in this situation,” says a Florida Republican who is close to both men. “David should voluntarily put some separation between them, but he knows how loyal Marco is and he’s taking advantage of that.” 

Will Rubio’s relationship with Rivera keep Mitt Romney from considering him as a running mate? It won’t be helpful.

Stephen F. Hayes is a senior writer at The Weekly Standard.

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